USD/JPY Price Forecast: Can Bulls Clear 157.5 Without Triggering a 160 Intervention Line?

USD/JPY Price Forecast – election euphoria, intervention risk and crowded resistance

USD/JPY – Post-election spike stalls just under heavy resistance

USD/JPY tried to extend its post-election rally but stalled right where sellers were expected to show up. Price pushed to an intraday high around ¥157.72–¥157.76, brushing the December 19 peak at ¥157.76 and stopping just short of the January 20 high near ¥158.60. That zone between roughly ¥157.7 and ¥158.6 is now the first major ceiling.
From there the pair slipped back toward ¥156–¥156.5, signalling that the attempt to reclaim the late-January breakdown zone has lost momentum for now. Short-term bias is still constructive as long as USD/JPY holds above roughly ¥155.7–¥156.0, but the difficulty breaking cleanly through ¥157.7 shows resistance is well-defined and crowded.

USD/JPY – Election supermajority and reflation risk push yields and FX expectations

Japan’s snap lower-house election delivered a landslide. Prime Minister Sanae Takaichi’s coalition secured more than a two-thirds supermajority in the 465-seat chamber, with the Liberal Democratic Party itself reportedly taking around 316 seats. That supermajority effectively removes upper-house veto risk and makes it easier to push through reflationary fiscal measures, including more aggressive spending and tax changes.
JGBs have already reflected this swing. When the election was called and the idea of a two-year suspension of the food sales tax was floated, longer-dated Japanese government bonds sold off hard, with a clear bear-steepening in the 2s10s and 2s30s curves as yields at the long end jumped. The Bank of Japan’s signal that it could increase bond purchases later pulled yields back down and flattened the curve again, but the size of Takaichi’s mandate now reopens the risk of renewed steepening, higher long-end yields and a structurally weaker yen if markets decide fiscal expansion is going too far.

USD/JPY – Intervention threat caps the “Takaichi trade” on a weaker yen

The political backdrop alone would normally have pushed USD/JPY sharply higher at the open, but the “Takaichi trade” fizzled almost immediately because intervention risk is now front-and-centre. The pair spiked only around 40–50 pips after the result, to about ¥157.66, then reversed lower and was trading near ¥156.5, with the yen the strongest intraday major in OANDA’s currency strength rankings.
Finance Minister Satsuki Katayama explicitly reminded markets that authorities are watching FX closely and are ready to act against “disorderly” yen weakness. That echoes the late-January pattern, when rate checks and suspected intervention helped drive USD/JPY from above ¥158 to a three-month low near ¥152.09 in roughly three sessions. The market now assumes that sustained trade above roughly ¥159–¥160 risks another heavy official response, because ¥160.23 was where the BOJ was previously instructed to step in back in 2024. That overhang is why rallies toward ¥157.5–¥159.5 are running into selling even with a reflationary government in place.

USD/JPY – Fed path, US data cluster and Treasury supply drive the dollar leg

The dollar side of USD/JPY is being pulled by a dense US macro calendar and shifting Fed expectations. Futures pricing implies around 54.5 basis points of easing for 2026, just over two standard 25 bp cuts, slightly more dovish than at the start of February. Retail sales, the Employment Situation report and CPI have all been compressed into one week because of shutdown disruptions, concentrating event risk.
Payrolls remain the main driver for Treasury yields and the dollar. If job creation or the unemployment rate hint at softer labour conditions, the market will push more aggressively toward earlier and deeper cuts, weighing on the dollar and limiting upside in USD/JPY. Conversely, a strong jobs print and firm core CPI would support the dollar and could push the pair back through ¥157.5, testing the January high at ¥159.45. Treasury auctions in the three-, ten- and thirty-year sectors add another layer: weak demand from offshore buyers would steepen the US curve and support the dollar, while strong demand would do the opposite.

USD/JPY – BoJ hike expectations, wages and Tamura keep the floor from collapsing

On the yen side, markets are still pricing a more active Bank of Japan, even after the election. Swaps imply roughly a 74% probability of a rate hike by late April, shortly after the annual wage negotiations conclude, with a move fully priced by June. By October, a second 25 bp increase is fully embedded, which would take the overnight policy rate toward about 1.25% if both hikes are delivered.
This profile makes Japanese wage data critical. A strong wage print on Monday would validate the view that inflation can be sustained and give the BOJ cover to push ahead with hikes, which would limit upside in USD/JPY even as fiscal policy becomes more expansionary. Markets are also watching Friday’s speech from board member Naoki Tamura, seen as one of the more hawkish policymakers. If he emphasises the need for further hikes, the yen could gain support; if he sounds more cautious than expected, that would undercut the yen and re-ignite upside pressure in the pair. That mix is why dips toward the January low around ¥152.10 are still being treated as strategic buying areas rather than the start of a structural yen trend shift.

USD/JPY – Technical map: 157.50 as pivot, 152.09 as the line that defines the last flush

Technically, USD/JPY has just bounced off a significant flush. After suspected intervention in late January, the pair broke below the key horizontal support at ¥157.50 and fell roughly 3% in three days, bottoming at about ¥152.09 – the lowest level in three months. From there, price recovered around 3.4%, peaking near ¥157.27 on 6 February before fading again.
On the daily chart, the rebound into the mid-157s has now produced a bearish engulfing pattern across the latest two sessions, a classic sign that buyers are losing control near resistance. The 20-day moving average sits around ¥156.36, and price slipping back below that level turns it into a short-term pivot. Holding under ¥157.50 and below the 20-day average tilts the bias toward another leg lower, with intermediate supports clustered around ¥155.66, ¥154.73 and ¥153.85 before the market even considers retesting the ¥152.09 low. Those levels will be where dip-buyers and intervention-watchers collide.

USD/JPY – IG and street positioning: bullish bias, but contingent on 155.70–156.00 holding

Technicians looking at the bigger picture still describe USD/JPY as bullish while above the early-February and early-January swing areas. IG’s mapping of the move frames the short-term uptrend as intact as long as price stays over roughly ¥155.70, with the broader medium-term structure positive while spot remains above the January low near ¥152.10.
In practice, that means the band between about ¥155.7 and ¥156.1, incorporating the early-January low at ¥156.12 and the early-February high near ¥155.78, is now the first important demand area. A sustained break below that region would tell you the post-intervention rebound has failed and bring the cluster around ¥154–¥155 into play. As long as that band holds, rallies back toward ¥157.7 and possibly ¥158.6–¥159.5 remain a live scenario, especially if the US data run skews dollar-positive.

USD/JPY – Sentiment, options and the psychology of intervention thresholds

Sentiment around USD/JPY has shifted from one-way bullish to more tactical and cautious. Options markets have repriced the tails: downside skew has firmed around the ¥152–¥153 area as traders look for protection against another intervention-driven air-pocket, while upside beyond ¥160 has become harder to price because historical experience says the BOJ is likely to reappear there.
The late-January pattern is still fresh. The market saw how quickly a move from above ¥158 to near ¥152.09 can unfold once official rate checks are confirmed. That memory makes participants more willing to take profit on longs near the old breakdown levels around ¥157.5–¥158 and more selective about adding fresh exposure at those heights. At the same time, the fact that the pair bounced aggressively from ¥152.09 shows that real money and macro funds still see dips into the low-150s as opportunities in a world where US-Japan rate differentials remain wide and Japan’s tightening cycle is shallow and slow.

USD/JPY – Macro-technical synthesis and directional stance: Hold, with a bias to fade strength

Putting the macro and the chart together, USD/JPY sits in a band where both upside and downside are constrained by identifiable catalysts. On the upside, reflationary Japanese fiscal policy, an active US data calendar and a still-wide yield gap support rallies toward ¥157.50 and potentially ¥159.45 if payrolls and CPI print on the strong side and US yields back up again. On the downside, intense intervention risk between roughly ¥159.5 and ¥160.2, combined with BoJ hike expectations and any upside surprise in Japanese wages, argue against chasing breakouts higher without a discount.
With price oscillating around the 20-day moving average near ¥156.36 and the last major low anchored at ¥152.09, the risk-reward profile favours a neutral core stance at this stage. The cleanest expression is a tactical “Hold” on USD/JPY at current levels: use strength into the ¥157.7–¥159.5 band to lighten exposure or hedge, and treat controlled dips toward ¥154–¥155 as places to reassess rather than assume a trend break until the ¥152 handle is seriously threatened. The pair remains biased to trade the range defined by intervention ceilings and BoJ-anchored floors rather than delivering a sustained, unchecked trend in either direction.

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